Urea Daily Review: Factories Increase Orders, Prices Slightly Raised to Control Orders

Domestic Urea Price Index:

According to Feidoodoo data, on November 29th, the small particle urea price index was 2527.86, up 3.64 from yesterday, an increase of 0.14% from the previous day, and a 10.45% decrease year-over-year.

Urea Futures Market:

Today, the opening price for urea UR2401 contract was 2323, with a high of 2344, a low of 2258, a settlement price of 2309, and a closing price of 2289. The closing price fell by 22 compared to the previous trading day's settlement price, a 0.95% decrease. The daily fluctuation range was 2258-2344; the Shandong area basis difference for the 01 contract was 151; the 01 contract reduced 13743 positions today, with current holdings at 183186.

Spot Market Analysis:

Today, domestic urea prices were slightly adjusted upwards. Factories raised their quotes after receiving good orders to control the number of orders, supported by supply guarantee policies with a small range of price increases.

Specifically, prices in the Northeast region were stable at 2510-2550 RMB/ton. In North China, prices were stable at 2340-2560 RMB/ton. In the Northwest region, prices were stable at 2470-2480 RMB/ton. In the Southwest region, prices were stable at 2480-2800 RMB/ton. In East China, prices rose to 2440-2490 RMB/ton. In Central China, small particle prices rose to 2440-2650 RMB/ton, and large particle prices were stable at 2580-2660 RMB/ton. In South China, prices rose to 2630-2660 RMB/ton.

Market Forecast:

From the factory perspective, factories have good order intake at low prices. Currently, Chinese urea enterprises have pre-order days of 6.59, and to control orders, most factories slightly increased prices, leading to a halt in the price decline and a market rebound. Traders remain watchful, and the market is in a state of factory-trader game. On the supply side, daily production remains high. Gas head devices in the southwest are likely to stop first, followed by shutdowns in the northwest and other places. Compared to previous years, a rebound is expected in February next year. On the demand side, agricultural demand is in a lull, and downstream purchases are mostly sporadic small orders; industrial demand follows a phased approach. In the market, under the influence of the "guaranteed supply and stable price" policy, the enthusiasm for chasing high prices has cooled, traders are watchful, purchases are cautious, and the market uptrend is under pressure.

In summary, the current urea market faces difficulties in price decline due to reduced production expectations but has limited upward potential due to supply support. It is expected that the urea market prices will continue to fluctuate within a range in the short term.